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2015 DIGILAW 906 (KAR)

Yamanappa v. Karnataka Vikas Grameen Bank

2015-08-12

B.VEERAPPA

body2015
JUDGMENT : This is an unsuccessful defendant’s second appeal against the judgment and decree dated 17.03.2011 made in R A No.35/2009 on the file of the Senior Civil Judge, Badami, confirming the judgment and decree dated 24.06.2009 made in O.S. No.225/1999 on the file of the Civil Judge (Jr. Dn.) and JMFC, Badami, decreeing the suit for recovery of money. 2. For the sake of convenience the parties herein are referred to as per their ranking before the Trial Court. 3. The respondent-plaintiff filed O.S.No.225/1999 against the present appellant-defendant for recovery of Rs.20,355/- along with interest @ 13.5% p.a. along with future interest contending that one Lalsab S/o. Modinasab Awati, resident of Katageri Village had approached the plaintiff bank on 10.11.1998 for financial help for his business, introducing the present defendant as guarantor/co-obligant to get the loan. Accordingly the plaintiff-Bank has sanctioned the loan on 23.11.1998 to an extent of Rs.25,000/- to the said Lalasab with repayment schedule to repay the same at a rate of Rs.690/with 35 installments commencing from 23.12.1998. According to the Bank, the loan was sanctioned to the above said Lalsab Awati in two installments i.e., on 23.11.1998 of Rs.15,000/and on 24.11.1998 of Rs.10,000/in loan account No.18/1998 which stood in the name of the above said borrower. According to the plaintiff – Bank, the said borrower was expired leaving behind no legal heirs. And further stated in the plaint that, as either the main borrower or the present defendant as a guarantor paid the dues to the Bank thereby the defendant became defaulter in payment of the said borrowed amount. The plaintiff–Bank has issued notice on 05.06.1999 to the present defendant to repay the outstanding balance towards the above said loan availed. As the defendant failed to comply in terms of the said legal notice as the main borrower died the suit came to be initiated against the present defendant, who is the guarantor for the recovery of the above said dues, as the defendant is jointly and severally liable to pay as his guarantee-ship is coexisted and therefore filed the suit. 4. 4. The appellant – defendant entered appearance and filed the written statement and denied all the plaint averments and contended that suit summons was served on his mother and in order to prove that he is not the Muttappa S/o. Vittappa and his name is called as Yamanappa Vittappa Maharajanavar and he has at no point of time became the signatory to the plaintiff-Bank towards the loan availed by the deceased Lalsab Awati. The plaintiff-Bank came up with false suit against them for recovery of the money which the present defendant is not at all concerned and he has further stated that the main borrower died intestate and without any legal heirs and he left one property situated at Katageri Village bearing VPC No.671/643 and on which the bank has created the charge and therefore the Bank is at liberty to recover the said amount by putting the said property on auction sale. Hence the Bank has no locus standi to file a suit against the defendant etc., therefore sought for dismissal of the suit. 5. Based on the rival pleadings, the Trial Court framed the following issues and additional issue :- “1. Whether the plaintiff-Bank proves that he is entitled to recover the suit amount with interest at the rate of 13.5% p.a. with quarterly rests from the defendant? 2. Whether the defendant proves that suit of the plaintiff-Bank is barred by limitation? 3. If so, what order or decree? Additional-Issue: 1. Whether the defendant proves that the suit of the plaintiff is hit by the non-joinder of the necessary party i.e., the administrator General or an officer of the Court or such other person to represent the estate of the deceased person for the purpose of the suit?” 6. In order to establish the plaintiff’s case its Manager examined PW1 and witness PW2- who was the earlier Manager when the transaction took place between the plaintiff and defendant and PW3 – the Police Witness and marked documents Exs.P1 to P33. Defendant examined as DW1 and marked documents Exs.D1 to D18. In order to establish the plaintiff’s case its Manager examined PW1 and witness PW2- who was the earlier Manager when the transaction took place between the plaintiff and defendant and PW3 – the Police Witness and marked documents Exs.P1 to P33. Defendant examined as DW1 and marked documents Exs.D1 to D18. After considering the entire material on record the Trial Court has recorded a finding that the plaintiff – Bank proved that it is entitled to recover the said amount with interest at the rate of 13.5% quarterly interest on the defendant and defendant failed to prove that the suit filed by the Bank is barred by limitation and held that the defendant failed to prove that the suit of the plaintiff is not hit by the non-joinder of necessary party i.e., the administrator General or an officer. Accordingly the suit filed by the Bank came to be decreed. Aggrieved by the said judgment and decree the defendant filed R.A.No.35/2009 on the file of the Civil Judge (Sr.Dn.), Badami, who after considering the entire material on record by the impugned judgment and decree dated 17.3.2011 has dismissed the appeal and confirmed the judgment and decree of the Trial Court. Against the said concurrent finding of fact the present appeal is filed. 7. I have heard the learned counsel for the appellant. 8. Sri B.V. Somapur, learned counsel for the appellant has contended that both the Courts below failed to notice that the name of the appellant – defendant is not Muttappa S/o. Vittappa but his name is Yamanappa Vittappa Maharajanavar and came to a wrong conclusion and thereby committed an error in decreeing the suit which has resulted in great injustice to the appellant. He also contended that the present appellant is in no way concerned with the loan transaction. His name is Yamanappa Vittappa Maharajanavar and not Muttappa S/o. Vittappa therefore, he specifically denied the signature on the alleged document, which has not been proved by the plaintiff, therefore he sought to dismiss the suit filed by the plaintiff – Bank against the defendant-guarantor as it is not maintainable. Therefore he sought to set aside the judgment and decree of the Courts below. 9. I have given my thoughtful consideration to the arguments advanced by the learned counsel for the appellant and perused the entire material on record. 10. Therefore he sought to set aside the judgment and decree of the Courts below. 9. I have given my thoughtful consideration to the arguments advanced by the learned counsel for the appellant and perused the entire material on record. 10. It is the specific case of the plaintiff-Bank that a sum of Rs.25,000/was sanctioned for financial help for the business of one Lalsab S/o. Modinasab Awati and the defendant stood as guarantor/co-obligant to get the loan. Though the defendant has denied the very transaction and denied that his name is not Muttappa S/o. Vittappa but his name is Yamanappa Vittappa Maharajanavar. The Trial Court, after considering the entire material on record has recorded a finding that PW2 who was actually working as Manager who sanctioned the loan to the deceased borrower approached along with the defendant and on the particular date of examination of PW2, the defendant purposefully remained absent. The plaintiff-Bank filed an application I.A.No.14under Section 45 of the Indian Evidence Act to take the signature of the defendant to appear with the Exs.P1 to Ex.P3 and P.12 and along with signature made in the written statement of the defendant but even the Court has ordered to keep present the defendant, but the defendant for the reasons best known to him has not appeared and complied the order passed of the Court passed on I.A.No.14 which goes to show that the defendant purposefully avoided the claim of the plaintiff Bank and remained absent and not complied the orders of the Court. Therefore, the Trial Court has taken adverse inference against the defendant that he has actually executed the guarantee agreement as per Exs.P1 to P3 and also recorded a finding that the evidence of PW2 who was the actual Manager who sanctioned the loan to the deceased Lalasab Awati categorically deposed that When PW.2 could be able to identify the defendant who has signed as co-obligant to the deceased borrower and if he is present in the Court, he could be able to identify him and stated that the present defendant’s name in the plaint is actually stood as guarantor, which clearly goes to show that the person so called defendant Yamanappa Vittappa Maharajanavar who had been with the deceased borrower and executed the Ex.P.1 to Ex.P.3 for the purpose of availing loan. The documents to that effect corroborates the evidence of PWs.1 and 2 and the signature of the defendant made on the written statement marked as Ex.P.32 (a), P.32(b) and on vakalat at Ex.P.33(a) and Ex.P.12 and Ex.P.14 while comparing with those documents exercising powers confirmed under Section 73 of the Indian Evidence Act as the signatures mentioned at the above said exhibits resembles as one and the same. Therefore considering all the documents the Trial Court came to the conclusion that the defendant stood guarantor to the loan transaction and Exs.D1 to D18 cannot be considered in the instant case as those Exs.D1 to D18 inspires any confidence along with the evidence of the defendant. The Trial Court further held that as per the records of the order sheet, it is mentioned on 7.6.2015 the said issue was treated as preliminary issue and it was heard and decided in the said order on the said date this Court has permitted the plaintiff to proceed against the present defendant under due course of law. Admittedly the defendant has not filed an appeal against the order passed by the Court permitting the plaintiff-Bank to proceed only against the defendant. The said order was final and conclusive. The Trial Court considering the provisions of Section 128 of the Indian Contract Act came to the conclusion that if the borrower fails to repay the amount and becomes defaulter and then the co-obligant/guarantor steps into the shoes of the principal debtor. Therefore, he is liable to pay the amount due to the Bank. Accordingly the Trial Court decreed the suit. 11. On re-appreciating the entire material on record the Lower Appellate Court framed two issues and answered first issue in the affirmative and second issue in the negative and on going through clause II (iv) on page 3 of Ex.P1 articles of agreement it is stated as under : “If the guarantee obligation hereby undertaken by him becomes inoperative of unenforceable for any reasons whatsoever the amounts due under these presents shall be paid by him as principal debtors and the bank shall be at liberty to recover the same accordingly” And held that on going through the said agreement it clearly indicates that plaintiff bank was at liberty either to proceed against the Principal Debtor or against the guarantor surety i.e., defendant in case of default. As the principal borrower has not repaid the loan and died before filing the suit, the Bank has every right to proceed against the defendant or along with the legal heirs as the case may be of the deceased. Accordingly, dismissed the appeal holding that the defendant failed to prove that the suit is barred by limitation. 12. It is worthwhile at this stage to consider the provisions of Section 128 of the Indian Contract Act, 1872, which reads as follows : “128: Surety’s liability:- The liability of the surety is coextensive with that of the principal debtor, unless it is otherwise provided by the contract.” 13. By a plain reading of the said provision makes it clear that the liability of the guarantor/surety is coextensive with that of the debtor. Therefore, creditor has a right to obtain a decree against the surety and the principal debtor. Surety has no right to restrain the execution of the decree against him. The Hon’ble Apex Court while considering the provisions of Section 128 of the Indian Contract Act in the case of Ram Kishun And Others Vs. State of U.P. And Others reported in AIR 2012 SC 2288 at paragraph 5 has held as under : “5. We have considered the rival submissions made by learned counsel for the parties and perused the record. There can be no dispute to the settled legal proposition of law that in view of the provisions of Section 128 of the Indian Contract Act, 1872 (herein after called the ‘Contract Act’) the liability of the guarantor/surety is coextensive with that of the debtor. Therefore, the creditor has a right to obtain a decree against the surety and the principal debtor. The surety has no right to restrain execution of the decree against him until the creditor has exhausted his remedy against the principal debtor for the reason that it is the business of the surety/ guarantor to see whether the principal debtor has paid or not. The surety does not have a right to dictate terms to the creditor as how he should make the recovery and pursue his remedies against the principal debtor at his instance. (Vide: The Bank of Bihar Ltd. v. Dr. The surety does not have a right to dictate terms to the creditor as how he should make the recovery and pursue his remedies against the principal debtor at his instance. (Vide: The Bank of Bihar Ltd. v. Dr. Damodar Prasad & Anr., AIR 1969 SC 297 ; Maharashtra State Electricity Board, Bomday v. The Official Liquidator, High Court, Emakulam and Anr., AIR 1982 SC 1497 ; Union Bank of India v. Manku Narayana, AIR 1987 SC 1078 ; and State Bank of India v. Messrs. Index port Registered & Ors., AIR 1992 SC 1740 ) 14. In view of the aforesaid reasons, the impugned judgment and decree passed by both the Courts below is based on cogent legal evidence on record and in accordance with the provisions of Section 128 of the Indian Contract Act, 1872 and in accordance with the dictum of the Hon’ble Apex Court stated supra. Therefore, the appellant has not made out any substantial question of law so as to interfere with the impugned judgment and decree of the Courts below under the provisions of Section 100 of the Code of Civil Procedure. Therefore, the appeal is dismissed at the stage of admission without reference to the respondent.